cloud servicesGlobal public cloud spending will grow at a rate nearly six-times that for the IT sector overall, rising at a 19.4% compound annual growth rate (CAGR) from 2015-2019, IDC forecasts. Market revenues will rise from nearly $70 billion in 2015 to more than $141 billion come 2019, according to IDC’s new Worldwide Semiannual Public Cloud Services Spending Guide.

Software-as-a-Service (SaaS) will continue to be the leading type of cloud computing, accounting for over two-thirds of total public cloud spending over most of the period. Worldwide spending on infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) will grow at faster rates, however, increasing at 27.0% and 30.6% CAGRs respectively out to 2019.

Software sector companies have been migrating to a cloud-first (SaaS) development and deployment model over recent years, IDC SVP and Chief Analyst Frank Gens commented in a press release.

¨By 2018, most software vendors will have fully shifted to a SaaS/PaaS code base. This means that many enterprise software customers, as they reach their next major software upgrade decisions, will be offered SaaS as the preferred option. Put together, new solutions born on the cloud and traditional solutions migrating to the cloud will steadily pull more customers and their data to the cloud.”

Public Cloud Revenue Forecast Drivers
Large companies will be the primary drivers of public cloud spending worldwide, spending more than $80 billion in 2019, IDC notes. SMBs (less than 500 employees) will make a significant contribution as well, accounting for over 40% of the global total.

Across economic sectors, discrete manufacturing companies spent the most on public cloud services in 2015 – $8.6 billion. Banking and professional services followed at $6.8 billion and $6.6 billion, respectively.

Looking ahead IDC expects public cloud spending across the professional services sector will move ahead of banking to account for the second-largest percentage.

Spending across the telecommunications industry will rise fastest overall, however.

IDC expects worldwide public cloud services spending by telecom industry participants will increase at a 22.2% CAGR from 2015-2019. Spending across the media, state and local government, education, retail, transportation and resource industries will all grow at CAGRs of more than 20%, IDC said.

“Cloud services will remain the essential foundation of the IT industry’s third platform of innovation and growth. As the cloud market enters an ‘innovation stage’, there will be an explosion of new solutions and value creation on top of the cloud,” commented Eileen Smith, Program Director, Customer Insights and Analysis for IDC.

“Industry-specific applications will be a driving force as businesses look for solutions that can be easily configured to their unique business and vertical requirements. With the huge increase in the number and diversity of services available in the market, organizations across the industries will shift steadily toward cloud-first strategies to enable digital transformation.”

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